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GDP recorded “strong contraction” in the second quarter of the year

Reflecting the economic impact of the pandemic, the Gross Domestic Product (GDP) contracted sharply in real terms in the 2nd quarter of 2020, having decreased 16.3% in year-on-year terms, after the reduction of 2.3% in the previous quarter ”, explains INE.

“These results revise upwards (0.2 percentage points) the rates of change presented at the end of last month due to the integration of additional primary information, namely related to international trade in goods and services in June”, adds the institute.

“This result is largely explained by the negative contribution (-11.9 percentage points) of domestic demand to the year-on-year change in GDP, considerably more marked than that observed in the previous quarter (-1.2 percentage points), reflecting the significant contraction in Private Consumption and InvestmentThe”.

According to the National Statistics Institute, “the contribution of net external demand was more negative in the 2nd quarter (-4.4 percentage points), reflecting the more significant decrease in Exports of Goods and Services than that observed in Imports of Goods and Services, largely due to the near disruption of non-resident tourism. ”

Compared to the first quarter of 2020, “GDP decreased by 13.9% (chain variation of -3.8% in the previous quarter)”, points the INE. “This result is also explained mainly by the negative contribution (-10.7 percentage points) of domestic demand to the chain variation of GDP, with a greater negative contribution from net external demand (-3.2 percentage points). “

Eurozone and EU GDP with biggest drop ever

The economies of the eurozone and the European Union (EU) recorded, in the second quarter of the year, the biggest decreases ever, both in the year-on-year comparison and quarterly, due to the consequences of the covid-19 pandemic, according to Eurostat.

According to a quick estimate by the EU statistical office, the euro area’s Gross Domestic Product (GDP) fell 15.0% compared to the second quarter of 2019 and 12.1% compared to the first three months of the year.

EU GDP, in turn, fell 14.1% year-on-year and 11.7% in a chain.

It is, in both zones and variations, the biggest drop since the beginning of the time series, in 1995.-

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